Tuesday, November 27, 2007

Clawing My Way To A Bear Prediction?

Every year I see it happen... The Christmas season comes along and what it brings could make or break you. People go out of their way and out of their minds, to buy the best gift.
Only to realize, maybe they should have bought them some stock for the holidays?

Every Holiday season could be reeking of the benefits soon to come, by simply knowing when a stock does it's best or even possibly, it's worse?
I'll have more to say about that later...

I feel the need to talk about "Nike" right now. NKE
Just because "I knew I should have gotten into them years ago?"
Eventually they go up steadily? Although they are a gigantic corporation soon to be bigger!
It's still a good stock.
From June to Dec, it seems to do it's best and then into the new year it ends. Almost every summer it peaks. A long with the Christmas season, it is a stock that does very well but also tends to drop off before and after the end of the year?
Do not underestimate this stock though!
It also likes to jump after the new year, or easily take the fall...
The trick of course is to know when they have hit rock bottom?
So if you like to Short a stock or maybe take a chance while it may be Low? I think this year and the next will be similar to the years of NKE.

Not knowing yet what may happen... I would SHORT NKE just before NEW YEARS.
Then BUY when I thought they might be at their bottom after that?
I would not buy them tomorrow either though... I would wait till Monday or Tuesday?

"Stock Risky"
The Bear(Paul Clos)

Monday, November 26, 2007

The Real Winner Of Cyber Monday Is...

With all the talk of retailers having to cut prices and in turn suffer though lower profit margins, shouldn't we be focusing on the bigger picture here? The mighty Google is the one directing a ton of traffic to all these different sites this holiday season. Not only that, but a smarter consumer that is looking for bargains is going to be more inclined to click on an ad or two while looking for the perfect price on a product. The more people that search for all these high tech gadgets and anything else they are looking for on the net the better...

More traffic = More Searches = More Money For Google

But wait there's more, in case you missed it Yahoo's server's weren't working for part of the day. Customer's couldn't even complete transactions through Yahoo on this all important Cyber Monday! Imagine all of those retailers that are going to come running over to Google Checkout... what better reason to switch then to have Yahoo let you down on one of the biggest days of the year! So guess where all those potential customer's went? That right, straight over to a site that allowed Google Checkout. With the Google Checkout promotion ending at year end this will certainly be a great future revenue stream for the big Goog.

So while I am continuing to be behind the Google Train, you had better think about waiting until after the next fed meetings coming up to be on the safe side, or just put on some now and some after the meeting. While I do believe the fed will cut, if they don't you will be able to get in at a lower price... Either way this is one of the best Long-Term holdings out there.

Tuesday, November 20, 2007

Catching The Falling Knife That Is Ceradyne

Ceradyne (crdn) has been in free fall since reporting earnings on October 30, 2007. It has fell from it's peak of $84.41 and is trading today at only $42.42! Wall street was not impressed when Ceradyne guided to the low end of guidance and has been punishing this stock ever since. This company is trading at only a 7.99 P/E ratio which is basically saying that this company can't continue to grow it's bottom line.
Let me give you some basic information about Ceradyne for all of you who are not familiar with this company. It is a small company valued at just over a billion in market cap and only 27 millions shares of float out there. They are a fully integrated developer and manufacturer of advanced technical ceramic products and components for defense, industrial, automotive/diesel, electronic and medical markets. The light weigh ceramic body armor has been one of the main drivers of it's growth over the past few years and with the war in the middle east continuing with no end in site, I think this will continue to fuel it's growth, but that is not the only reason why I like this stock.

Ceradyne has two major proposals that it has turned into the federal government for review. The first and most important in my eyes is the BULL combat vehicle. Ceradyne has been working with OshKosh Trucks to develop this vehicle that can withstand the roadside bombs that have been causing so many casualties in the ongoing conflicts in The Middle East. The BULL has already passed limited testing by the military and is currently in the advanced stages of testing. Ceradyne expects some sort of a response by the end of this year or early next year. Along with this possible contract they have also submitted a body armor contract for their XSAPI body armor, this too is under review by the government.

Since Ceradyne is not completely sure if it will land these two contracts they have issued a very broad range of guidance for the next year and this spooked investors even more who went running for the exits. Yet another growth opportunity is it's business in China. They have constructed a factory there that will produce high purity ceramic crucibles which will be used in the manufacturing of silicon solar cells. They have also made two recent acquisitions which could help produce some major revenue streams in the future. EP Boron and Minco are both solid well establish companies that could further help Ceradyne's bottom line. So basically, as the saying goes you should never try to catch a falling knife, but I can tell you there is nothing wrong with just picking it up off the floor... This stock pick is certainly very risky, but I think the long term prospects of this company could really make for some huge gains in the future. Plus Ceradyne just announced today that they will be hosting a teleconference on November 27, 2007... could this be where they announce the results of The BULL testing? Either way we should see some major price action on this stock that day...

Thursday, November 15, 2007

Reap The Benefits Of High Energy And Pollution With CECO

CECO Environmental Corporation (stock symbol CECE) is looking like a great long term play on tightening environmental standards and a world that is becoming more polluted with every passing day. They just reported earnings on Monday of 14 cents per share, beating analysis expectations of 12 cents per share. Revenue rose an impressive 73% over last years to $65.3 million which also beat the estimated $58.8 million.

CECO Environmental Corp. has been providing clean air solutions for over 94 years for such companies as Motorola, Exxon, Ford, Dupont, and U. S. Steel. They design, build and install complete systems to improve air quality and meet the government's regulatory requirements of their diverse customer line. CECO is also the exclusive suppler to the U. S. military for destruction of nerve gas. Its filtering systems were engineered into incinerators where several thousand tons of Sarin and VX nerve gas and blister agents have so far been destroyed, along with more than half a million rockets, bombs, mortars and mines.
I believe that as the environmental situation worsens around the world governments will be forced to step in and implement tougher standards on all companies, which will play directly into CECO's hand. This company has also recently paid off almost all of it's debt last quarter due to it's secondary offering. With a strengthening balance sheet and a growing product line CECO looks like it will be in the sweet spot for the next few years. This little known gem is only a 196 million dollar company by market cap with only 14.79 million shares of float out there so it certainly has a lot of room to grow.

Remember though with small companies like this there is big risk, but there is also big rewards. I think this could prove to be one of the best plays on the coming tougher standards that will inevitably be put in place by governments around the world. Don't forget sometimes going green can make you some green!

As I write this CECO is trading at $13.37...

Friday, November 9, 2007

Don't Buy All At Once!

It's weeks like these that remind me not to buy a stock all at once, and to focus on the long term and not to panic driven short term. You can get burned badly, especially when the market takes a dive right after you buy. Here is the proper way to buy a stock...

Let's say you have $1000 to invest in a stock that is trading at $100 per share, you should put in half or less of your investment and then if it drops to $90... it's a gift! Now you can purchase those same shares at a discount to what you paid earlier for them. If you would have put all your money in at once you would be down a quick 10%... ouch!

Now, of course this can work in the opposite fashion as well were a stock goes from $100 to $110, but all you are doing there is not making as much money as you could have if you would have thrown it all in at once. Buying in increments is the safest and most intelligent way to build a position in a stock. This rule will help you become a better more disciplined investor. Another thing that buying in increments can do for you is to lower your cost basis. Cost basis is basically your break-even price on a stock. Think of it this way, if you buy that same $100 stock and it drops to $90 like above, you can buy it again at $90 and bam! You just lowered your cost basis to $95. This means when the stock goes back up to $95 you have already broke even on your investment. This can be a great thing to consider when you have your stock takes a big unjustified hit, you just invest again at a lower cost and in turn lower your cost basis. This makes it easier for your stock to get back to the green, even if your stock never climbs back to the price you first bought it for!

Tough week, but I think things will begin to turn around next week... Remember when the market has a correction like this it brings out some fantastic buying opportunities. Stocks I think will do well next week are Goog, VDSI (calling a bottom), CECE (reports on Monday), and BA $94.21!

Good luck to all... and stay tuned to stock picky for more stock picks and tips!

Tuesday, November 6, 2007

Riding The Royal Bank Of Canada To New Heights

As we continue to watch the banks here in The United States implode from the inside, I have been looking north for quite some time now to Canada for financial stocks that are actually worth owning. My favorite from the great white north is The Royal Bank Of Canada stock symbol (RY).

In my opinion this is one of the best, and safest picks out there in the financial sector right now. Not only is the Canadian dollar just killing the American dollar, but the subprime mess has hardly effected Canada, if anything it has actually help them. With the stronger dollar Canadian companies like The Royal Bank Of Canada can make acquisitions inside the United States and around the world for much, much cheaper than they could have years, or even months ago. Royal Bank Of Canada is taking advantage of this already by purchasing a Caribbean bank and Alabama National BanCorporation recently.

Not to mention, that juicy 3.65 dividend yield is payable in Canadian dollars so investors here in The States reap the benefits of a strong loony through the dividend payments! This is a company that consistently raises it's dividend and is all about creating shareholder wealth while growing the company core business at conservative pace.

As if that weren't enough reason to own (RY) they just announced that they will be buying back 1.6% or 20 millions shares of the company. This should provide a nice downside protection against any kind of negative price movement in the stock.

Royal Bank Of Canada is also one of the most respected corporations in Canada, and does a ton of work for it's communities and the environment, so you can even sleep well at night knowing you own this one... Overall, I would say this is one of the safest picks I have made so far and one of the best long term investments out there, but I would be slightly cautious going into their earnings report on 11-30-07. My suggestion would be to buy some here, and buy some after earnings this way you don't get burned if there is something in the quarter that investors don't like...

For more about Royal Bank Of Canada visit their website here or to learn more about why a good dividend like the one this company has is so important click here!

As I write this article Royal Bank Of Canada is trading at $57.77